November 2nd 2024.
The Australian government, led by Prime Minister Anthony Albanese, has announced a new plan to provide financial relief to millions of Australians burdened by student debt. The plan, which focuses on addressing the rising cost of living, will see a 20% reduction in student debt for all individuals with outstanding loans. This includes various types of income-contingent student loans, such as HELP, Vet Student Loan, and Australian Apprenticeship Support Loan.
The details of this plan will be shared by Prime Minister Albanese during a campaign rally in Adelaide tomorrow, where he will be joined by South Australian Premier Peter Malinauskas. According to government estimates, this initiative will result in a reduction of approximately $16 billion in debt for accounts that exist on June 1 of next year. For a university graduate with an average HELP debt of $27,600, this means a reduction of around $5,520 in their outstanding loan.
This announcement builds upon the government's previous reforms to fix the indexation formula, which was announced in the 2024-2025 Federal Budget and will result in a further $3 billion reduction in student debt. In total, the Albanese Government plans to cut close to $20 billion in student loan debt for more than three million Australians. Legislation will be introduced next year to give effect to this commitment.
The education minister also announced that the Albanese Government will be raising the minimum repayment threshold for student loans and reducing repayment rates, in order to create a fairer system for all individuals with student debt. Prime Minister Albanese expressed his determination to provide immediate relief to those currently struggling with student debt, while also working towards a better long-term solution for all students.
The rising cost of living has been a major concern for many young voters, particularly those under the age of 35. Data released by Commonwealth Bank in August showed that this demographic has been hit the hardest by multiple interest rate and rent increases, resulting in their savings being significantly depleted. This new plan by the Albanese Government aims to alleviate some of these financial pressures and provide much-needed relief to young Australians.
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